Soft magnetic powder cores are used for electromagnetic conversion coils, which are essential for automotive, home appliance, and electronics industries. These cores, manufactured by compacting pure iron powder covered with an insulation film, are distinguished by their high electromagnetic conversion efficiency. However, the electromagnetic conversion efficiency decreases markedly when they are subjected to the conventional finishing process. This is directly attributable to the conductive layers formed on the finished surface that significantly reduce the electrical resistance of the core surface. To solve this problem, we have developed an electrolytic re-insulation grinding method that finishes the core while an electric current is applied to the interface between the core and the grinding wheel. This method regenerates the insulation properties of soft magnetic powder cores through electrolytic removal of the conductive layers formed during the finishing process to improve electrical resistance. This process enables the manufacture of soft magnetic powder cores without compromising their electromagnetic conversion efficiency.